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Luzadis Company makes furniture using the latest automated technology. The company uses a job-order costing system and applie

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Answer #1

1) Applied overhead = 61000*8 = 488000

Actual overhead = 514000

Under applied overhead = 514000-488000 = 26000

2) Adjusting entry

Date account and explanation Debit Credit
Cost of goods sold 26000
Manufacturing overhead 26000

3) Adjusting entry

Date account and explanation Debit Credit
Work in process 2600
Finished goods (26000*19%) 4940
Cost of goods sold 18460
Manufacturing overhead 26000

4) Net operating income increase by (2600+4940) = 7540

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